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US Transportation Chief wants to bring back zero-tariffs in civil aviation

Sean Duffy, the U.S. Transportation secretary, said that he wants civil aviation to go back to a zero-tariff agreement from 1979 but added that it was part of broader talks on trade.

Duffy, speaking at the Paris Airshow said that the White House is aware that the U.S. has a large aerospace export market, but that it faces a complex tariff situation.

Airline companies, plane manufacturers and other U.S. trade partners are lobbying Trump for the restoration of the tariff-free regime that was established under the Civil Aircraft Agreement in 1979. This agreement has resulted in an annual surplus of $75 billion dollars to the U.S. industrial sector.

Look at the impact of free trade on aviation. They've had a remarkable experience. It's an area of great net exporters. The White House is aware of this, but when you visit and see what's going on there you'll realize that it's pretty intense. "I believe we should remove aviation from the negotiation table and go back to 1979. That will only help us." We would also benefit from taking some tools from our trading partners.

The U.S. President Donald Trump imposed 10% tariffs on almost all aircraft and parts imports. In early May, the Commerce Department began a national security investigation under "Section 232", which could lead to even higher tariffs.

Aerospace

Companies in many countries

Trump has been urged to refrain from imposing new tariffs.

Trump's executive orders on a deal signed with the United Kingdom include tariff-free treatment for airplanes and their parts.

GE Aerospace CEO Larry Culp stated that the "U.S. - U.K. Trade Deal eliminating tariffs on aerospace sector is a major step forward in preserving a duty-free environment."

He praised the "Trump Administration for recognizing that aerospace is a critical part of the U.S. economic engine and for supporting this deal as an example for future trade deals." Reporting by Joe Brock and David Shepardson, Washington. Editing by Mark Potter & Franklin Paul.

(source: Reuters)